Bank analysts see 'implosion' ahead

09-04-2009 • MSN Money

Hold tight folks, it’s not over yet. Bank failures heated up this summer, but expect an “implosion” next year. That’s the key takeaway from a deep dive into second-quarter bank results by sector experts at Institutional Risk Analytics, now that all the numbers are all in. Despite the huge amounts of government money poured into the banks and a sense that conditions are better -- witness the big gains in bank stocks -- the number of banks getting the worst grades for strength actually shot up 12% in the second quarter. In a study released Sept. 1, IRA concludes that 2,256 banks deserve a failing grade, up from 2,012 in the first quarter. Banks getting an “F” grade included giant Citigroup (C). 4 'zombie' stocks better off dead “Despite all of the talk and expenditure in Washington, the U.S. banking industry is still sinking steadily,” says Christopher Whalen of IRA. Besides mounting problems with loans, a big part of the problem is that federal efforts target th